Customs Act

Customs Duty is a type of indirect tax, i.e. it is not paid directly by the consumer out of his income or wealth but at the time of importing or exporting any goods. It is an important source of revenue for the Central Government. In India, the basic law for levy and collection of customs duty is the Customs Act, 1962 on imports and exports of goods from India. However, the rate of Customs Duty for various goods is prescribed in the Customs Tariff Act, 1975 along with various notifications published by the Central government in the Official Gazette of the Government. Apart from revenue, customs duty can be used for achieving several other objectives such as :-

• Restricting Imports for conserving foreign exchange
• Protecting Indian Industry from undue competition
• Prohibiting imports and exports of goods for achieving the policy objectives of the Government.
• Regulating exports
• Co-ordinating legal provisions with other laws dealing with foreign exchange such as Foreign
• Trade (Development & Regulation) Act, Foreign Exchange Regulation Act, Conservation of Foreign Exchange and Prevention of Smuggling Act, etc.

The following are the main sources of Customs Law in India :-

Customs Act, 1962

This is the principal act which provides the levy and collection of customs duty, prescribes procedures for import & export of goods, etc.

Customs Tariff Act, 1975
This act prescribes the rates of duties of Customs Duty on import and export of various goods. This act contains two schedules :-

Schedule 1 classifies the goods for import and prescribes the rate of import duties.

Schedule 2 classifies the goods for export and prescribes the rate of export duties. In addition, it provides for additional duties, preferential duties, anti-dumping duties, protective duties etc.
Rules

The central government has the power to make rules in order to carry out the purposes of the act. Various rules have been framed under these rules such as Customs Valuation Rules, 1988 for valuation of imported goods for calculating custom duty payable, Customs and Cen tral Excise Duties Drawback Rule, 1971 for calculating rates of duties as drawbacks on exports, etc. However, if there is any conflict between the provisions of the act and Rules, the provisions of the act shall prevail.

Regulations

The Central Board of Excise and Customs (CBEC) has been empowered to make regulations to carry out the provisos of the act. However, if there is any conflict between the provisions of the rules and regulations, the provisions of the rules shall prevail. Various regulations have been framed such as Customs House Agents Licensing Regulations, 1984 for regulating the functioning of custom house agents, etc.

Notifications

The central government may also issue notifications in the Official Gazette for the purposes of the act. The Central government has several notifications under various sections such as partial or full exemption from duty, prohibiting certain imports and exports, etc.